House of Commons Hansard #77 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was students.

Topics

Department of Human Resources and Skills Development Act
Government Orders

4:40 p.m.

Conservative

Peter Van Loan York—Simcoe, ON

Madam Speaker, this bill is a worthy symbol of the Liberal government. The Department of Human Resources and the Department of Skills Development were separated a year and a half ago and Parliament is being asked to approve it only now. So much for treating Parliament with more respect and solving the democratic deficit.

We support the bill simply because there is little point in opposing it, but let us consider what is missing. At a time when students are struggling with rising debt and Canada's economic competitiveness is lagging, the bill ignores the real issues while focusing instead on changing names on letterhead and reorganizing bureaucratic organization charts.

The bill ignores the priorities that should be the focus of the government's attention in HRDC or, as it is to become, HRSDC. Perhaps it already has become that because the government, it seems, even if we were to oppose it, would declare, as it did with the foreign affairs and international trade departments, that it does not matter what this House says, it will divide it anyhow.

While the government is focusing on that kind of bureaucratic shuffling as the matter for us to attend to, there are other issues that should be attended to that are not. Our economic competitiveness is suffering while Canada's training strategy is woefully lacking. Students are increasingly in debt. Employment insurance is still not resolved as an issue. Skills training, critical to economic growth and prosperity, is lagging and is ignored.

Canadians have dreams for a better Canada, to have brighter futures through education, to enjoy the fruits of their labour through lower taxes, to live in a country that is free from corruption, to have a competitive economy and to have the opportunity to improve their quality of life through advancement and improvement.

However where are we under the government? Canada now ranks 15th in the world economic forum's global competitiveness rankings. Canada used to be ranked 4th, back when the Prime Minister was finance minister. From the 4th spot to the 15th spot in competitiveness is the track record of the government while it is focusing on bureaucratic shuffles.

In that same report from the world economic forum, Canada dropped on the technology index from 2nd place to 13th place and dropped to 15th place in the business competitive index in 2004.

A few years ago Canada was fifth on Transparency International's clean government index. That is an index that measures perceptions of how corrupt a government is in a country.

Today Canada has plummeted from 5th spot to 12th spot on that clean government index, and that was even before the Gomery commission started doing its work and hearing evidence. I do not think that this year's ratings are something to look forward to for Canadians. Perhaps in training the government might think of having a little more training in ethics.

Declining support for education and productivity is affecting our quality of life. In 1993, when Brian Mulroney retired as Prime Minister, the United Nations human development index ranked Canada the number one country in the world to live. By 2003, Canada had fallen to eighth place on that index. Simply put, taxes are too high in Canada. They are killing the incentive to be productive and they are making it difficult for hard-working families to invest in their futures.

As well, Canada has the fifth highest income tax as a percentage of GDP of all the OECD countries. Since taking office, the amount of income tax revenue that the government takes in has almost doubled, increasing by 80%.

Since 1993, Canada has been tied for the lowest productivity growth in the G-7 and Canada's productivity has fallen to 84% of that of our American neighbours.

What is Bill C-23 doing to handle this competitiveness gap, this productivity gap that's emerging, the declining standard of living? What is it doing to really help Canadians acquire better skills so we have a more educated and better equipped workforce to compete in the world? Nothing. Nothing in the bill addresses any of those priorities, which are the real priorities of Canadians and should be the real priorities of this government and the human resources department.

In skills training, what has the government done? Direct funding to colleges has been cut to the tune of 80% since the Liberals took office. Colleges are the best proven providers of workforce training. In fact, of those who graduate from the community college system, over 90% end up in jobs where they are contributing right after graduation. This is a 90% success rate.

However, when we look at the training programs in the human resources department, the evidence given by the minister at committee on estimates showed that less than 50% of those who graduated from the human resources EI training programs found work.

The community colleges have a 90% success rate and the government cuts their funding by 80%. The EI training program has a 50% or less success rate and the government begins to funnel money into it.

It is clear to me that the way of approaching training in this country is very poorly equipped for the challenges of our current economy. It is one that does not recognize success and one that in fact recognizes and reinforces failure.

There is no focus in the bill on what is needed to stimulate economic growth and productivity through skills training, which leads me to post-secondary education. What has been the case for post-secondary education in Canada? Under the present government we have not seen a serious effort to recognize that post-secondary education is critical to the success of our economy and to our workforce to helping young people achieve their dreams for a brighter future.

Interest rates on student loans, loans that are given to people who are trying to advance themselves and improve themselves, things we should be encouraging people to do, are at prime plus 2.5% to prime plus 5%. That is what the government is charging people who have taken out student loans.

Even bad risk lenders get around prime plus 1% from a bank or prime plus 2%. Why is the government running the student loan program as a profit making centre? Clearly there is no interest in being serious about support for post-secondary education.

In addition, we still do not have a dedicated transfer for post-secondary education even after the Liberal government cut program funding to colleges and universities in half since taking office.

What have we seen on employment insurance? Only thanks to the fact that this is a minority Parliament have we seen any action at all. It was only by attaching an amendment to the throne speech to deal with the flaws in employment insurance that the opposition parties finally forced a reluctant Liberal government to act on the matter.

What action have we seen? Sadly, very little. Currently, EI has a $46 billion surplus that has been effectively stolen from workers and diverted into other priorities, other than what they had contributed to. This is $46 billion of workers' and employers' premiums that have been taken away from them. It is another regressive tax by the government applied to things that do not do anything for economic growth and prosperity, that do not help workers and employers and that do not create jobs. It is a tax that is slowing the economy and creating a drag.

What do we get? We get a government that says it is doing something but it is still dithering. Virtually no changes have been made to the employment insurance system. In everything the government does it simply goes through the motions and dithers.

The government is not taking action and through the bill what is it doing? It is simply reorganizing organization charts, printing new letterhead and sending out for new business cards because we are changing the name of the department.

Meanwhile the real priorities are ignored by the Liberal government. It is unable to stop overtaxing through its unreasonable employment insurance premiums. It is unwilling to make training relevant, to create a competitive economy and to increase productivity. It is unaware of the need to lower ridiculously high student loan interest rates. It is unremitting in its refusal to establish a dedicated transfer for post-secondary education.

Unfortunately, the bill does nothing for Canadians other than create a bureaucratic shuffle to support a cabinet shuffle in an effort to shuffle the scandal ridden HRDC name into the past.

Why is the bill even on the table? It is very simple. It is because the government wants to get rid of the odour of the HRDC scandal. That is what prompted the name change in the first place. That was an example of how the government could not manage the people's tax dollars and, in fact, took those tax dollars and diverted them to other improper, inappropriate partisan purposes. Does that sound familiar?

The bill does nothing to benefit Canadians from the actual changes in the operation of government. It is only a public relations exercise to get rid of that HRDC name that is now so scandal tainted.

However it will not work because the one thing we can count on in the Liberal government is that as one scandal gets left behind, do not worry, there is another one coming along pretty soon to take its place.

Department of Human Resources and Skills Development Act
Government Orders

4:50 p.m.

Peterborough
Ontario

Liberal

Peter Adams Parliamentary Secretary to the Minister of Human Resources and Skills Development

Madam Speaker, I wish to thank my colleague for his support. I do not look forward to the occasion when he will oppose us on some legislation.

We can all use statistics and I think constructive criticism is what this place is all about. I do not want to go through the various items that he put forward in great detail. I would point out however that the expression “brain drain” here in Canada, which only a very few years ago was a very common expression, brought great fear that we were losing talent from this country far more than we were bringing it in. We do not hear it anymore and I believe one of the reasons for that is the action taken in several of the areas that my colleague talked about.

The other is with regard to post-secondary education. I think if he did the calculation, he would discover that the moneys being spent now by the federal government are getting into the order of magnitude of the amount of money being spent by all the provinces combined in the area of post-secondary education which is traditionally viewed as an area of provincial jurisdiction.

I have greatly regretted, and I must be very careful how far I go on this, the fact that on a number of occasions, when the federal government has done something positive in the area of post-secondary education, various provinces have clawed back and have not followed-through. So, I have some empathy with at least one of the things that he said.

I would like the member to comment on the origins of the legislation. First, it is true that it sounds like a bureaucratic exercise, but in fact, it is an attempt to deliver better, and they should be delivered better, the sorts of services and programs that he has such great concern about.

I believe that the new streamlined department will do that more effectively for years to come. However, the idea did not come from the government. It came from a standing committee of the House which unanimously recommended that the old department be divided. The House and members of all parties supported the recommendation. It was not something that the government initiated. It was something that the House of Commons recommended and is being followed-through on by the government.

Does he think that he should have gone against the views of his party in committee and in the House of Commons at the time when this recommendation first appeared in this place?

Department of Human Resources and Skills Development Act
Government Orders

4:55 p.m.

Conservative

Peter Van Loan York—Simcoe, ON

Madam Speaker, unlike my friend from Peterborough, I am handicapped by not having been here when the parliamentary committee dealt with that matter.

However, having been a concerned Canadian like so many others, I recall what happened to the HRDC department. I recall the scandal, the concern, and the conclusions that people drew, that it was a department that was out of control, that could not be managed, that was behaving entirely not in the best interests of Canadians, and that something had to brought to bear.

To me, the fact that there would be a unanimous decision of a Commons committee that a department, so discredited by a scandal, required reform and change is not surprising at all. In fact, I can understand entirely that there was a serious need for reform. I hope that reform is taking hold and that it spreads to other parts of the government.

We have seen ample evidence that perhaps that kind of reform in cleaning up of departments is not as contagious as we might like it to be in the government, but to me, it is not at all surprising. I indicated that our party supports the legislation. We do not oppose it.

It is just that when we have so many things that are crying out to be addressed in this country to make our economy more productive, to improve our skills training, to make us more competitive, and to give us a workforce that can really compete where people really can advance themselves, where they can really live richer lives, that we spend our time on these kinds of questions, and these kind of basically bureaucratic internal department reorganization questions instead of focussing on those real priorities of Canadians. That is what troubles me so much right now.

Department of Human Resources and Skills Development Act
Government Orders

4:55 p.m.

Bloc

Christiane Gagnon Québec, QC

Madam Speaker, it is a pleasure to speak on this important issue: the creation of a new department called the Department of Human Resources and Skills Development. Obviously, the legislation creating this new department will ultimately split the Department of Human Resources and Skills Development into two departments. One of them will be called the Department of Social Development.

In the coming weeks, this new legislation to create a new department will be discussed and debated, as will the legislation before us today, called the Department of Human Resources and Skills Development Act, minus a portion of its budget and some of its responsibilities, which have been transferred to the Development of Human Resources and Skills Development.

The Bloc Québécois believes that the creation of this department will result in greater infringements in other areas of jurisdiction, not because of the creation of this department but because of the second part, which will be called the Department of Social Development Act.

That department will truly interfere in areas under provincial jurisdiction relating to social affairs. Also, the Department of Human Resources and Skills Development has failed to respond to criticism from Bloc Québécois about issues such as the power of the employment insurance commission. Furthermore, the Bloc's calls for changes to employment insurance have been ignored.

This department will continue to administer the employment insurance fund. It is well known that this fund has a $46 billion surplus, which the government used to eliminate its deficit. So, instead of going to the unemployed, this fund went to fattening up the government, which is now flush. It is flush for other reasons too. I am referring to the fiscal imbalance. There is more than one surplus in the Liberal government's coffers.

For all these reasons, we do not believe in the spectacle we are seeing today. I know this department wants to project the image of a government concerned with the quality of life of its citizens and interested in helping them more on a daily basis.

I will explain why the government wants to pass this new Human Resources and Skills Development legislation.

On December 12, 2003, when the Prime Minister was being sworn in and introducing his new cabinet, he divided the former Human Resources Development Canada into two departments—as I was saying earlier—the Department of Human Resources and Skills Development and the Department of Social Development.

As my colleague from the Conservative Party was saying earlier, these departments already exist and today's bill is merely a formality. These departments have been operating for a year now.

The press release issued by the PMO on December 12, 2003, included reasons justifying this division, the purpose of which, according to the government, was to strengthen our social foundations.

In support of the government’s social goals, a number of changes are being made. A stronger focus on social policy through:

Splitting the former department of Human Resources Development Canada into two separate organizations in order to facilitate better policy results and improved administration.

Creating a new Human Resources and Skills Development department whose mandate will be promoting well-functioning labour market and lifelong learning systems, including student assistance, and which will work with Citizenship and Immigration Canada on the critical issue of foreign credentials accreditation.

Thus:

Mandating the Minister of Human Resources and Skills Development to engage the private sector, non-governmental organizations—

—persons with disabilities, families, and children, and which will provide integrated policy development and program delivery.

That same day, December 12, 2003, with the announcement of the creation of these two new departments, the office of the leader of the official opposition in Quebec issued a press release stating that the official opposition was unreservedly opposed to the establishment of a new Department of Human Resources and Skills Development, a Department of Social Development and a cities secretariat. These structures are useless to Quebec. They reflect the federal government's interference in Quebec's jurisdictions.

This new department created by the Prime Minister on December 12, 2003, includes more than 14,000 public servants responsible for managing $20 billion to strengthen the social foundations of Canada, build a 21st century economy and ensure Canada's role in the world.

The Department of Human Resources and Skills Development no longer comes under the former Human Resources Development Canada, but is its own department, which also coordinates the activities of the Minister of Labour and Housing, and the Minister of State Human Resources Development.

From this, it is clear to us that the government intends, in fact, to manage all social development issues, to better manage our social foundations and better support the population. Finally, in the last election, this government did not understand the impact of its interfering attitude and encroachment in fields of jurisdiction. Quebec elected a strong majority of Bloc Québécois members in the latest election. Since 1993, this government has still not understood that the time has come to stop its practice of strangling the provinces as they try to cope with serious responsibilities for providing people with services they are entitled to expect.

In Quebec, students recently went on strike. They were demanding the right to continue receiving bursaries. We can easily see that Quebec's educational institutions are under-financed as well and that, since 1993-94, the federal government has been totally stingy in its transfer payments to provinces. It cut off funding to the provinces and solved the deficit problem here, in the federal government. However, it reaped the surpluses from the employment insurance fund, with the fiscal imbalance and the propensity to grab funds that rightfully should go to the provinces.

The Department of Human Resources and Skills Development says that:

HRSDC's vision is a country where individuals have the opportunity to learn and to contribute to Canada's success by participating fully in a well-functioning and efficient labour market.

Once again we see that, if the government really knew what the labour market needed, it would not be writing such hollow phrases that mean nothing, with goals that will not be met.

We are now studying the EI employment programs. We are well aware that there are serious shortcomings in the implementation of these programs in Ontario and British Columbia. They are not suited to the needs of those who want to return to the labour market. We are well aware that the funding is often inadequate. There is no continuity in the federal government's commitment.

We therefore have serious questions to raise. We know that all kinds of dirty tricks are being used to get us to understand better suited strategies, but still, they must meet the needs of the institutions and agencies working to get people back into the labour force.

With this bill, it is clear that the federal government's attitude is contrary to what has been requested. Very early on, in 1993, we could see that the Bloc Québécois was the one demanding that provincial jurisdictions be respected, so that the provinces could better provide for their people. Now, public discontent is high in the other provinces.

With respect to the federal government's arrogance and how it distributes this money, it is as if it owned the money, as if the government were generating and printing it. One would think the government was doing the people favours. Instead, it should respect the fact that, through their taxes, the taxpayers are allowing it to redistribute the money among the people.

We will therefore oppose this bill because it falls short of our expectations in terms of improvements to the overall EI system. Again, it is clear that the quotes I read, which are from the Department of Human Resources and Skills Development, are nothing but hollow words.

The Bloc Québécois asked that $1.9 billion be reinvested in support for workers who lose their jobs, to improve employment insurance fund eligibility coverage. This would allow coverage to rise from 55% to 60% of salary, at an increased cost of $1.2 billion to the EI fund. Everyone is affected. There is only 55% coverage, and it has dwindled over the years. That is how this extravagant $46 billion surplus came to be.

We would have liked the eligibility threshold to be brought down to 360 hours, from the current 910 or 700 hours. We would have liked a return to a threshold that is much more flexible and suited to the reality of the labour market in certain regions. It is clear that, unless confronted with job loss, there is no feeling of sensitivity from this government. We are talking about 90,000 unemployed people who are affected by the high threshold for eligibility to benefits.

We would have liked the benefit rates to be based on the 12 best weeks. Again, improved EI benefits could have been provided to 470,000 unemployed persons, at a cost of $320 million to the fund.

In addition, we would have asked for a maximum of 45 to 50 weeks of total EI benefit coverage, amounting to $11 million, and an increase in the maximum insurable amount from $39,000 to $41,000. That is an additional $245 million.

I have added these amounts up for a total of $1.9 million. Did the government have the means to pay this money out to those who had lost their jobs, to provide insurance for these people who had contributed to the employment insurance fund, in order to get better benefits for a longer period?

Clearly these expectations were not met, because the Minister of Human Resources and Skills Development proposed a mere $360 million in reforms, below the expectations of the Bloc Québécois. We know full well that $46 billion is there. This money accumulates year after year in the employment insurance fund. The government puts billions of dollars annually back into the employment insurance fund.

This is the federal government's little stash.

Rather than meet these expectations, the government could have repaid the debt to those who have contributed to the employment insurance fund. The federal Liberal government seems to have forgotten that this debt is outstanding.

It could have begun repayment gradually. Of course, no one expects the government to put the $46 billion back in the employment insurance fund and to increase benefits overnight. Still, the return of $10 billion in annual payments of $1 billion might have been a possibility, employment insurance benefits might have been improved.

The rate of contribution to the employment insurance fund currently at $1.95 could be increased by 3 cents. That way half of the $1 million could have been used to meet expectations.

The Bloc has not proposed all these improvements to the employment insurance fund to improve its image. We have been in touch with the people. We have tabled 12 bills on this in the House. Since 1993, the Bloc Québécois has been calling on the government to improve the employment insurance fund, which is a public disgrace. People are now much more aware of the impact of an arrogant federal government.

The provinces are on their knees before the federal government to get more in transfer payments. The same thing happened with equalization payments. We are waiting for the government to move. It moves at its own pace, but arrogantly. For example, when a province is on its knees begging from the federal government, often some slight concessions are made to ease things.

What they want is to create a new department, a department with a social mandate, but such a department will not meet the expectations of the most disadvantaged members of society, the most vulnerable, the ones who are losing their jobs. It is not true that there is a job for everyone today. It is time to stop playing ostrich; some regions do not have economic activity 52 weeks a year. Adjustments have to be made.

There is mention of the desire to adapt to the labour market. Employment insurance must be properly administered. It is a program paid into by its contributors, with not one cent in the EI fund coming from the federal government. We know there is a surplus. I can understand that they want to keep some money in reserve in case there is a deficit in the EI fund. That is understandable.

However, considering that the employment insurance fund generated surpluses in excess of $46 billion, one wonders about the federal government's will to adequately support workers. They are the ones who need this insurance money to meet the needs of their families.

This also has a huge impact on regional economies. Indeed, these people and their families spend increasingly less in their communities, because they do not have the money to meet all their needs, whether it is food or housing needs.

Affordable housing is another issue which I did not raise. During the election campaign, the federal government promised to invest an additional $1.5 billion to help those who cannot find adequate and safe housing. There again, the Liberal government did not meet expectations.

So, the government is creating a social development department. We will discuss this at some other time. Today, I wanted to deal strictly with the employment insurance account. However, I am aware that there are other areas where the government boasts about wanting to meet public needs. But in fact, it does just the opposite. The government would rather use that money to increase its visibility in the provinces. The federal government also wants to establish contacts with community networks to show that it is the one, and not the provinces, that has the money. This raises the whole issue of fiscal imbalance.

The federal government denies the following.

In fact, 71% of Quebeckers and 65% of Canadians now understand what the fiscal imbalance is all about. The fiscal imbalance is created by a situation where the federal government has too much money in terms of its responsibilities, while the provinces have less money because their taxation rate is greater than their responsibilities.

I thank hon. members for listening to my comments. I will get back to the establishment of the new department of social development.

Department of Human Resources and Skills Development Act
Government Orders

5:15 p.m.

Peterborough
Ontario

Liberal

Peter Adams Parliamentary Secretary to the Minister of Human Resources and Skills Development

Mr. Speaker, I always appreciate my colleague's remarks. I do appreciate the time she puts into our committee work, both in connection with Bill C-23 and in other matters, many of which she discussed.

We are debating Bill C-23, legislation which redesigns a federal government department. The member from the official opposition who spoke made the point that it was a bureaucratic exercise. I do agree that it is, but I disagree with him in that I think it is a very important bureaucratic exercise, one which will ensure that all Canadians get better services from the newly designed department. I can give one simple example. The privacy provisions in the legislation which replace four or five different privacy codes and which protect Canadians who are involved in employment insurance, Canada student loans or whatever it is, are better.

I have to say to my colleague from the Bloc that in Bill C-23 we are discussing the redesign of a department. I would repeat that the standing committee recommended this some years ago, and the House of Commons unanimously supported the report of the committee to redesign this particular department, and the Bloc supported that. We are carrying through with something the Bloc wanted.

It is a bureaucratic exercise. For example, my colleague mentioned provincial jurisdiction. There is no change in provincial jurisdiction. We have divided one department and created two more. The legislation does not affect the relationship between the federal government and the provincial governments at all. It is simply the same jurisdiction, the same services, but delivered in a different way.

I do not think through Bill C-23 that there is any impingement on provincial jurisdiction. It is simply better delivery of the same services in the same way as before. That is very important, in part because unanimously the House, including the Bloc, supported it.

The hon. member mentioned EI. I know she is passionate about EI, but under the Standing Orders when a committee is given a bill to study, such as Bill C-23, it cannot increase expenditures associated with that legislation. It simply cannot. It cannot say that it will change the department, it will redesign the department, and by the way, it will add a billion dollars to EI or whatever it is. I know my colleague knows this, but I want her to comment on that. It is not possible through our process to change the things she was describing through Bill C-23.

Department of Human Resources and Skills Development Act
Government Orders

5:20 p.m.

Bloc

Christiane Gagnon Québec, QC

Mr. Speaker, I listened to what my colleague from the Liberal Party said. When one does not have the will, one surely cannot do anything.

If there were a deficit in the employment insurance fund, I might understand that the government did not have the means. However, it has $46 billion, which was taken from the employment insurance fund. Moreover, less than 50% of the unemployed draw EI benefits. Consequently, the government could have made an extra effort. This is a futile exercise that was presented by the Minister of Human Resources and Skills Development in terms of the assistance that people had every right to expect.

When they do not get assistance from the employment insurance fund, where do you think that people get assistance? When their head is in the sand, they get assistance from the provinces through welfare. When people want to receive welfare benefits, they must be at the end of their tether. Consequently, they must have no money in their pockets or in the bank. At that time, they can go on welfare. This is putting people up against the wall.

Now, why are we opposed to this bill? Because this is a very different situation: the splitting of a department in two. The second department will be called the Department of Social Development. One of our reasons for opposing the present bill is that we are against the establishment of such a department. Our expectations with respect to the employment insurance fund were not met. We know full well that the Canada Employment Insurance Commission is another small group. It will be continued and shall consist of four commissioners to be appointed by the governor in council. The four commissioners shall be the deputy minister of Human Resources and Skills Development, who shall be the chairperson of the commission; an associate deputy minister, who shall be the vice-chairperson; a person appointed after consultations with organizations representative of workers and another person after consultations with organizations representative of employers.

The Bloc Québécois was calling for something else, to better reflect the reality. We asked that the commission in question be comprised of the following members: the chairperson of the commission, the two deputy ministers or associate deputy ministers from Human Resources. Where it differs is that we called for seven employer and employee representatives.

We wanted a more open commission, one that is not internally managed and that is more transparent. In fact, upon taking office, the prime minister himself said he wanted more transparency and that he would be more responsive. Again, the government showed bad faith and, true to itself, it is continuing to do so with arrogance, claiming all powers.

We cannot give our support this time, because this is a very different situation from the one when the other bill was passed.

Department of Human Resources and Skills Development Act
Government Orders

5:20 p.m.

Bloc

Mario Laframboise Argenteuil—Mirabel, QC

Mr. Speaker, first I want to congratulate my colleague from Québec for her excellent speech on this bill.

I would also like her to remind us that, apparently, some negotiations went on concerning this human resources department. However, we must never forget that the departmental concept that is proposed, particularly the Employment Insurance Commission, is the same as the one that was managing the former Department of Human Resources, where, believe it or not, $1 billion disappeared. That was the human resources scandal, because this money has not been found. This is the reality. The government was unable to find the billion dollars and is proposing the same structure to manage the employment insurance fund, that is, the structure that lost $1 billion.

Today, the government is trying to lead us to believe that it is effectively dividing the department and that, consequently, everything will be better. No, it will not be better. This is why the Bloc Québécois opposes the bill.

I would just like my colleague to explain to us quite gently and calmly what the Bloc wants: the money that must go to the provinces should go to the provinces and the rest should go to the unemployed and be managed by employers and employees sitting on one committee. This is quite simple.

Department of Human Resources and Skills Development Act
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5:25 p.m.

Bloc

Christiane Gagnon Québec, QC

Mr. Speaker, I believe I was sufficiently clear. We want employees and employers to sit on this commission too. I do not understand this government's refusal to allow the contributors to sit on the commission. I cannot understand this business-as-usual attitude. This government has not learned a single lesson, even after the unemployed came here to testify.

The Bloc Québécois shook things up with regard to the EI fund. The Bloc Québécois did the work in an effort to improve the fund, and we said they had the means. However, all that time, the Liberal Party denied having several billion dollars—$46 billion—in surplus funds. That is astronomical. They are clearly arrogant since they have continued to say, year after year, that they had the money.

I remember the former Prime Minister, Jean Chrétien, saying in the House, “We will show the provinces that we can maintain the social programs”. I understand why he was able to say that, given the fiscal imbalance, slashed transfer payments to the provinces and, later, the employment insurance fund. I can understand why the federal government, which is swimming in surpluses, can be so arrogant and can force the provinces to their knees. More than ever, we demand that the EI fund be opened up to its contributors and that the government stop considering itself the beneficiary of this fund, which belongs to those who contribute to it.

Department of Human Resources and Skills Development Act
Government Orders

5:25 p.m.

Bloc

Marcel Gagnon Saint-Maurice—Champlain, QC

Mr. Speaker, the time remaining to me will only permit me to get a start on what I want to say. I can, however, take the time to congratulate my colleague from Québec on her excellent and instructive speech. It is important to keep in mind just how inefficient the government over there is, and how lacking in imagination and honesty. It was very kind of her to give the figure for the EI surplus as $45 or $46 billion, but in fact it has reached $54 billion.

This government is taking possession of money that does not belong to it, and doing it with a smile. If the man next door to me did that, he would end up in jail. Yet they are doing it with a smile. Over the last ten years, the government has also pocketed $3 billion belonging to seniors. They want retroactivity, and are told it is not possible. Retroactivity is possible when the government is owed money, but when the government is the one owing, there is no retroactivity.

It goes into the fund, but that is not the right word for it—since, according to some, the fund does not exist—but it does go somewhere, under some government budget heading. They brag about it, calling it good administration. I find it incredible that departments and structures are being created rather than helping those who are suffering from poverty and giving money back to those who are entitled to it. There have been 49,000 new jobs created in the federal government over the past five years. If you assume the value of one job and all the employee benefits to average out at $100,000 a year, we can imagine that this is money that was not used to help people who are living in poverty and suffering, or given back to the unemployed or the elderly.

I will continue with this subject later.

Department of Human Resources and Skills Development Act
Government Orders

5:30 p.m.

The Deputy Speaker

It being 5:30 p.m., pursuant to order made earlier this day, the House will now proceed to the consideration of private members' business as listed on today's Order Paper.

The House resumed from February 25 consideration of the motion that Bill C-236, an act to amend the Bankruptcy and Insolvency Act (student loan), be read the second time and referred to a committee.

Bankruptcy and Insolvency Act
Private Members' Business

5:30 p.m.

NDP

Nathan Cullen Skeena—Bulkley Valley, BC

Mr. Speaker, it is a pleasure to rise on behalf of my colleague and the NDP with respect to this important bill on students loans and bankruptcy, Bill C-236.

Specifically, I would like to start with a few shocking numbers. In the House we have heard a number of times the current government of the day talk about how well it has done on behalf of students, particularly post-secondary students. The reality in terms of the numbers is otherwise.

Since the Liberals took power, we have watched $4 billion cut out of core funding for post-secondary institutions and the average increase in student debt over that period rise by 110%. The average debt for students leaving with bachelor degrees is now at $25,000. For students obtaining more than bachelor degrees, it is close to $100,000.

These numbers tell me there is a situation of dire need for university students leaving and entering post-secondary institutions. I use this strong language of dire need because these people often represent the greatest hope for our country in terms of their ability and capacity to formulate part of our economy, the investment the country needs to make consistently for Canada to become the world leader, as the government would pretend us to be.

When it comes to post-secondary institution funding, the numbers speak for themselves. Taking $4 billion out of core funding over the period the Liberals have been in office and then calling it a success story is an absolute embarrassment. It is a shame that the bill is even necessary.

The Liberals have now introduced legislation that suggests the way students can get out of bankruptcy is if they die. It is most commendable on their part, but they should not be congratulated at all for their cynicism and approach in dealing with student debt and poverty.

They refuse to invest in education. The numbers will roll out and the Liberals will talk about how wonderful they have been contrary to the real and anecdotal evidence we see by the number of students leaving university or being barred from them. It is representative of a lack of courage on behalf of the government to tie any investments they have made in post-secondary institutions. The money is passed to the provinces and in some cases they have been able to defer their contributions, leaving universities in the same dire strait. That has caused tuitions to go up.

When the NDP government in British Columbia left office, the Liberal government that took over immediately lifted the freeze on university tuitions. This caused tuition fees to escalate and put them beyond the reach of many ordinary Canadians and their families.

We want to be leaders in the world and we use that language often in the House. Yet by not investing soundly in post-secondary education, it leaves us behind the rest of the world, a world which knows that advanced technology and education will be the coming economies.

I look at the numbers presented to me in terms of the debt load of students who are leaving university. These moneys go to our financial institutions, primarily the large banks, rather than go to where the economy needs that investment. The banks have been reporting record profit quarter after quarter. They are doing exceptionally well.

I am not sure a lot of tears need to be shed for the banking institutions. They have done well and no one should condemn them too much, given what they have produced in economic joys for their shareholders. With regard to investing, the question becomes this. Is the money better placed in the private banks and taken out of the hands of students so when they leave post-secondary education, they are required to pay these loans, which students are exceptional at doing?

When we compare it to the corporate sector's ability to pay back and not default on loans, students have been consistently reported as good risks, if we can use that term. These students are no longer able to invest, put a down payment on a home, or purchase a car, when they are leaving their student life with a crippling debt. In the past 13 years the average student debt has gone up by $1,000 per year, every year.

Certainly, if such a similar increase and rapid expansion in debt were placed on our business community, the cries would be loud and far-flung across the House, but because it is students, there seems to be some notion that we can tolerate something like a 110% increase in tuition fees during the life of a government.

I went to college, as many members of the House did. I had an excellent experience which afforded me better opportunities to seek good, sound, and well paid employment, yet I left with a burden of student debt that inhibited my ability to contribute more to the economy. It held me off for a number of years before I could start up my own private business and take an incurred debt and risk that is needed for just about every business venture.

Many people ask why we should change the Bankruptcy Act when most Canadians, particularly most students, that enter into a loan arrangement with a bank have all the intention of paying that loan back in good faith. Students will often do whatever they can by just about any means necessary to pay these back. We need, in this House, to dispel the myths that students are bad investments or that they are at great risk of defaulting on loans when the numbers are absolutely showing the opposite.

We need to recognize the contribution that universities make across this country to their local communities and that those students make to the local communities as well. We must truly see them in terms of an investment, no different than the investments that we consistently find room to make in terms of the auto sector, large industries, or border security. All of these investments that we seem to come to the conclusion are sound investments for the prosperity of this country, yet, the government continues to dither on promise after promise made to the people of Windsor to improve their border situation.

It seems to me that the government and the Prime Minister, and the former finance minister, understand the principle of investment. The Prime Minister understands that lowering the costs for business that he previously ran by moving it offshore was a sound and wise move for the profitability of his business.

Yet. when we talk about the investment needed for students in this country, the House stalls and stutters, and pretends to pat itself on the back for issuing such ideas as small investment in students that may be born today that will achieve a $5,000 perhaps $7,000 grant available to them 18 years from now. At the current rate of increase in tuition, putting it out of the hands of most ordinary Canadians, what will that look like 15 or 20 years from now? What will the proposal that the Liberals have brought forward actually do for students? I hesitate to think that it may get them through their first semester, if that.

In 1998 the Liberals changed the act to say that Canadians cannot receive bankruptcy protection for student loans until 10 years after they complete their studies. This is unfair. This special treatment of students is the absolute opposite of the message that this government should be sending to our young people. Our message should be that we trust them, that we believe in them, and that we are willing to invest in them. Surplus after surplus has shown up for the Liberal Party because of its miscalculations on the budget. The Liberals are exceptionally skilled at missing the mark over and over again, regardless of how many economists they bring on board.

However, in all of these surpluses and particularly this surplus year, the Canadian Federation of Students, and other advocacy groups for students, found the budget not only wanting and lacking but an absolute failure when it came to investing in students. Even in the face of a huge surplus beyond everyone's expectations and combined with all the rhetoric that we heard during the last election, and consistently in the House about the need to support students, there is still a continued cynical lack of support for students by the government.

I appreciate this bill. It is a strong bill. We look for the bill to be supported throughout the House.

Bankruptcy and Insolvency Act
Private Members' Business

April 6th, 2005 / 5:40 p.m.

Bloc

Alain Boire Beauharnois—Salaberry, QC

Mr. Speaker, I am pleased today to rise in this House to speak to the bill to amend the Bankruptcy and Insolvency Act, a bill that is very dear to my heart.

First, I must say that the Bloc Québécois is in favour of Bill C-236. It is thus in favour of reducing from ten to two years the period of time during which a former student cannot be released, through bankruptcy, from the reimbursement of his debts relating to student loans.

This legislative change will specifically assist the least fortunate among former Quebec and Canadian students and will restore a balance between the moral duty to reimburse the state for the loans and the right to be released from their debts through bankruptcy.

The Bloc Québécois considers that the ten year period, which affects only former students, is too long and is thus a discriminatory measure that is uncalled for.

The Bloc Québécois is aware that bankruptcy must not become an easy way for students to be released from their debts. However, it is unfair to deny this relief to former students who are really in need.

It is because of the fiscal imbalance created by the federal government that Quebec and the provinces now have to increase tuition and change the bursary and loans programs. These measures have a direct impact on the level of student debt.

Allowing former students to clear their student debt by declaring bankruptcy does help the least fortunate Quebeckers and Canadians, but does not provide a sustainable funding solution for the post-secondary education system.

The federal government's lack of vision and willingness to significantly increase education transfers is a clear indication of how much it prefers visibility measures such as the millennium scholarships over truly beneficial measures.

Reducing the timeframe in which a former student cannot declare bankruptcy to clear their debt would help reduce the financial pressure on the poorest in our society, people who, upon finishing school, do not find gainful enough employment to pay back their loans.

Although in Quebec—by virtue of a social choice that distinguishes us from the other Canadian provinces—the average student debt is less than in the other provinces, this does not change the fact that some students are burdened by debt they are unable to pay off. The proposed measure would allow students to benefit, with a very reasonable limit, from the same right as other people, and that is to clear their debt by declaring bankruptcy.

The two-year period proposed in Bill C-236 is short enough so as not to hurt lower income former students. There does need to be a certain period where the student must try to make arrangements to fulfill their financial obligations.

I also want to point out that student debt is a major contributing factor to the drop in Quebec's birth rate. Debt overload discourages thousands of Quebec students from starting a family.

The bill has two major flaws. First, it does not include any measure to hold students responsible for fulfilling their financial obligations and using their loans appropriately. Obviously, students are not irresponsible and there is no reason to believe they do not manage their money as well as other individuals.

However, measures to raise student awareness of the use of loans and of repayment terms would have added value to what Bill C-236 proposes.

Second, the bill is not providing any real answers to the underfunding problem of post-secondary education systems. The fiscal imbalance that is continuing to choke Quebec and the provinces is the primary reason why students get into debt. A substantial increase in direct transfers to Quebec and the provinces is the best way to curb student debt and ensure quality education.

Since the 1990s, federal transfers for post-secondary education have dropped dramatically. Even the Canadian Association of University Teachers came to the conclusion that the weakening of the provinces' ability to fund post-secondary education is primarily due to the reduction in federal transfer payments.

When the member for LaSalle—Émard became Minister of Finance, Ottawa paid 1.7¢ on every dollar of revenue into the transfers for education and social services. When he left his position, nine years later, Ottawa was paying only 1¢ on every dollar of revenue. This represents a 40% decrease.

The federal contribution to total expenditures in education and social programs is now less than 12%.

The Bloc Québécois wants the issue of fiscal imbalance resolved, which would mean a substantial increase in funding available to post-secondary education.

In keeping with the consensus of the provincial premiers, the Bloc Québécois wants federal funding to be 25% of the total expenditure on education and health care by 2009-2010.

Currently, the Quebec system of education is short of resources as the result of cuts in transfer payments, a lack of funding, a shortage of teachers and so, despite the monumental efforts of the Government of Quebec with the meagre resources at its disposal.

The Fédération étudiante universitaire du Québec, the FEUQ, and the Canadian Federation of Students are also critical of the federal government's refusal to increase transfer payments for post-secondary education by $4 billion to offset the cuts during the 1990s. This money would have allowed Quebec to expand its manoeuvring room in order to reinvest in universities, and the rest of Canada to reduce tuition.

In closing, I want to reiterate the Bloc Québécois's support for this bill so students can start their working life in a respectable fashion, and I invite the other parties to support it.

Bankruptcy and Insolvency Act
Private Members' Business

5:45 p.m.

Chatham-Kent—Essex
Ontario

Liberal

Jerry Pickard Parliamentary Secretary to the Minister of Industry

Mr. Speaker, Bill C-236 proposes a substantial change to the existing rules respecting the treatment of student loans in bankruptcy. It is therefore essential that we do a thorough assessment of the proposals that are being made to make a proper determination.

The present rule is that an individual who goes bankrupt cannot have his or her student loan debt discharged unless at least 10 years have passed since he or she was last enrolled. This is in sharp contrast to the rule applicable to the debts which are typically discharged nine months after assessment in bankruptcy has been filed.

The 10-year rule was introduced in 1998 following a period in which losses to the Canada student loans program through personal bankruptcies had risen greatly. Many of these bankruptcies were occurring shortly after the individual left school. This type of behaviour represented a risk to the viability of the Canada student loans program. Indeed for the 1995-96 year alone, the fiscal cost of bankruptcies involving student loans totalled more than $100 million.

Since then the cost of bankruptcies has been reduced dramatically. In 2000-01, the last year where complete data is available, the cost of bankruptcies to the Canada student loans program was only $5.8 million.

While curbing the potential scope of abuses under the bankruptcy system, the government proceeded with vast improvements to the financial assistance to a student under the Canadian opportunities strategy, including improved access to the Canadian studies grant program, the investment of $2.5 billion in Canada millennium scholarships, a tax credit on student loan repayments, extension of interest relief periods, and the introduction of the debt reduction in repayment measure. These measures have been designed to provide students in financial need with viable alternatives to declaring bankruptcy.

Under the interest relief program it is now possible to go five years after leaving school without being required to make a payment on a student loan. During that time the Government of Canada bears the cost of interest on that loan. In 2001-02 over 140,000 Canadians took advantage of these generous provisions at a cost of $77 million.

Moreover, for borrowers who still experience financial difficulties after interest relief measures have been used up, there is then an actual debt reduction mechanism available allowing the borrowers to permanently dispose of over $26,000 in student loan debt.

I would also stress that the government has stayed on top of this issue. It has responded to the concerns regarding these support measures. In the last three years alone the budgets have contained measures to extend relief or to make relief measures more accessible to people experiencing hardships.

While some may argue that students are unfairly singled out, it is clear from these details that the Canada student loans program is quite generous to those legitimately facing financial problems.

We must also respect the fact that student loans are made available based upon a drastically different basis than a consumer loan. There is no examination of credit worthiness of the borrower. No collateral is required. The loans are interest free during the study periods. The schedule of repayment is flexible and accounts for the financial situation of individuals.

With these mechanisms available, there is some question as to the need for further relief through the Bankruptcy and Insolvency Act. It is reasonable to assume that any provisions for discharge of student loans must show coordination between the Bankruptcy and Insolvency Act and the provisions of the Canada student loans program.

Bill C-236 creates unnecessary overlap between the relief provisions of the Canada student loans program and the Bankruptcy and Insolvency Act.

The point is that there are relief measures available short of bankruptcy. Should those not be used as the first step?

Unfortunately, the bill therefore does not reflect existing relief measures, preferring rather to simply dismiss the debt when other options exist. This poses a very real risk to many students who take a few years to truly develop their full earning potential. It is at that point that their ability to pay becomes more certain and a fuller assessment of the appropriate relief can be made. The bill before us would bypass the measures in place to assist borrowers in favour of walking away from the debt entirely.

Bill C-236 would result in substantial financial cost to the government. In addition to loans financed directly, there are risk shared loans which could affect a large number of people as well. These risk shared loans are funded directly by financial institutions with a risk sharing mechanism which brings in government. The change proposed would likely require contractual agreements and additional compensation to those lenders.

This is the effect only at the federal level. Provincial student loans programs are also captured by the present rules so any change would result in any further levelling of costs there.

I am pleased to tell members of the House that in keeping with the ongoing improvements that have been made to this program, we are reviewing the bankruptcy discharge provisions in the existing legislation. This follows on consultations across the country held by Industry Canada with the participation of a wide range of stakeholders, including student representatives, as well as a more recent report on solvency law issues by the Senate Standing Committee on Banking, Trade and Commerce. That report recommended a reduction in the discharge period to five years and perhaps less in cases of hardship.

Building on this input, officials of both Industry Canada and HRSDC are now examining the many comments and the existing provisions to ensure the Bankruptcy and Insolvency Act and the Canada student loans program are properly integrated and reflect a fair and reasonable standard of discharge for student loans.

In conclusion, the government wants to stress that the period of discharge of student loans must properly take into account measures under the Canada student loans program, the relief available, the continued Liberal access to loans and the costs associated with bankruptcies.

On the face of it, Bill C-236 does not do that. As a result, it fails to provide a fair and reasonable alternative to current provisions of the Bankruptcy and Insolvency Act pertaining to student loans. The government cannot support Bill C-236.

Bankruptcy and Insolvency Act
Private Members' Business

5:50 p.m.

Conservative

Loyola Hearn St. John's South, NL

Mr. Speaker, after listening to the representative of the governing party, I must say that I am surprised that the Liberals are going to further study the issue. What else is new? The government cannot make a decision on it so it will study it and somewhere down the road it will make a decision.

That is not good enough. Despite what the member says, despite the minuscule changes that have been made to assist students, many students in the country are coming out of post-secondary education institutions with a millstone around their necks, with extremely high debt loads which they just cannot handle.

The answer certainly is not bankruptcy. In very few cases students have to resort to declaring bankruptcy; I understand it is somewhere in the range of 2%. To hear people talk one would think that if we allowed students to declare bankruptcy, there would be a lineup, that they would get a student loan, get an education and declare bankruptcy.

Students get an education. They understand the implications of declaring bankruptcy. They understand the onus on them to repay their loans. Consequently, the only time we see bankruptcy happen is when there is severe strain on the student.

I understand the member is willing to move to two years to five years. If that is the case we certainly have no problems agreeing with that piece of legislation and will support it. The student could then assess his chances in the future. Some people who have a post-secondary education do have a hard time finding worthwhile employment. Sometimes it depends on the geography.

This great country of ours is rich in resources and has tremendous potential. The government should realize that in order to develop this potential and turn the economy of the country around, we need people to do it. We need people with an education.

Education is not cheap. I hear too many people say that tuition is not that bad. It varies from province to province. Tuition in my province probably is one of the cheapest, fortunately.

Those of us whose children are in post-secondary education, or have been recently, know that education in this country is not cheap. It is not just the tuition.

Some students live near the university or the post-secondary institution and can walk to school, come home for dinner and stay under their parents' roof where mom and dad pay the bills. Those students have the family car to go to after hours activities. In those cases the cost to a degree is borne by the parents. In those cases the students would not have a heavy debt load, but the costs of books and tuition are heavy enough.

Students from the rural areas have to come in to the university or post-secondary centres. They need to get an apartment, which has to be furnished. They need to buy food, to arrange travel not only back and forth to the institution, but also back and forth to home. Throw in all the other costs besides and it more than doubles the cost of their education.

I challenge anybody to add up the costs of educating an individual who comes from an outside area. If that person can be sent to university for less than $15,000 a year, that student is eating a lot of Kraft dinner.

Education is not free; it is not even cheap. What are we doing? The government has done absolutely nothing to improve the accessibility to education. It turns people away from getting an education.

Coming out of post-secondary education with a debt load is one thing as long as the student gets a good job, and most people who come out of post-secondary institutions usually do get good jobs. They will eventually surface, but students come out with a millstone around their neck. Their hands are tied for years. That house, that car, all the things that young people need and would love to have, need to be put aside because of their debt load.

The sorrowful thing, the worst part of it all, is the young person who looks at the cost of education, whose family perhaps cannot assist their children because of the cost of education and because of the economy in many of our rural areas. This also applies to many urban families. He or she knows that even if they borrow the maximum student loan, it does not cut it. There is a gap. If that gap cannot be filled there is one option and that option is for them not to go to school at all.

Many of our young people, realizing the burden they will put on their families, realizing the debt load they will face themselves when they get out, or realizing that in most cases halfway through they will have to call it quits, realizing all of this, they do not go.

Let us look at the investment we as a country have to make in people who cannot find long term employment. Let us look at the social costs, the unemployment insurance costs, the social welfare costs and the social housing costs. Let us look at the other related problems. Sometimes when people get frustrated their mental and physical health deteriorate so there are health care costs as well. I could go on.

I challenge anybody to compare two young people, one who gets an education, even with some debt load, and one who does not get an education. The individual with the education contributes for the rest of his or her life by paying taxes, buying furniture, buying houses and buying cars, which in turn creates more employment and pours more money into the government as a result of their taxes. That individual is contributing to society, while society, in most cases, has to look after the person who does not get an education. It is a no-brainer. We invest a little up front to help a student get an education or we pay a heavy price down the road.

It is time for the government to wake up. Instead of making excuses on an issue like this, on helping a student get out from under this cloud of bankruptcy, the government should be putting its money where its mouth is. If a modification were made to the bill to move it to five years as a test for now to see how that would work, that would be quite reasonable and it is something we could support.